Impact of Corporate Social Responsibility on Trade Credit: Evidence from Listed Non-Financial firms in Pakistan Stock Exchange
Abstract
This study explores the relationship among Corporate Social Responsibility and Trade credit of listed non-financial firms of Pakistan. This study have used a sample of 40 listed nonfinancial firms in Pakistan for analysis. Data is extracted from annual reports of firms for year 2012 to 2020 and numerous examination techniques like descriptive statistics, correlation analysis, regression and Hausman test have been performed on the data. The study finds significant association of trade credit with corporate social responsibility which indicates that firms that are indulged more in corporate social responsibility activities will have more dependence on trade credit. Firm age, Firm size and financial leverage have also found to have significant impact on trade credit. This indicates that older firms having strong reputation have more accessibility to trade credit, trade credit reliance also increases with the increase in firm size and financial leverage. Market capitalization has found to be insignificantly impacting trade credit. This study is significant as fewer studies have been found in context of Pakistan. This study aids in managerial decisions for investors and regulatory bodies.
Key Words: Corporate Social Responsibility, Trade credit, Firm Age, Firm Size, Market capitalization, Financial leverage, Listed non-financial firms, Pakistan
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